WazirX Exchange Reboot Plans: Singapore Court Rejects Restructuring Proposal

Key Takeaways

• The Singapore court has rejected WazirX’s restructuring proposal, which 93% of creditors supported.
• The Indian exchange promised to reimburse users starting in February, but it has been postponed indefinitely.
• WazirX restructuring plan hearing was extended to June 7 by the Singapore court earlier.

WazirX users hoping for compensation may need to wait a little longer, as the Singapore court has rejected the exchange’s restructuring plans.

The court had pushed the exchange’s restructuring hearing to June 7, citing more evident proof of creditor support.

Nearly a year after a $235 million hack, the Indian crypto exchange says it’s ready to relaunch, backed by what it describes as overwhelming backing from creditors.

Singapore Court Rejects Restructuring Plan

The rejection could be due to the creditors’ voting scheme, which the exchange claimed had over 90% approval, while the majority of the creditors on social media claimed otherwise.

This has now pushed back the redistribution of the remaining funds indefinitely as exchange users struggle to get back their non-hacked funds.

“Our primary focus remains to begin distributions as soon as possible. Towards this goal, we are currently evaluating all available legal options in consultation with our legal and advisory teams, and are considering an appeal against the decision of the Singapore High Court.”

Restructuring Hearing Extended

In May, the Singapore court extended WazirX’s restructuring approval hearing by another month, requesting formal proof of creditor voting.

The Indian crypto exchange submitted documents claiming that more than 90% of its creditors supported the restructuring plan.

However, the high approval rate has raised eyebrows within India’s crypto community. Many victims publicly criticized the proposal, which offers only 51% to 55% in fund recovery and paves the way for WazirX to launch a new business venture.

Voting Details

Voting was conducted on the Kroll Issuer Services platform from March 19 to March 28. According to WazirX, more than 141,000 scheme creditors participated, representing a total of $195.6 million in approved claims.

“We are grateful for the strong vote of confidence,” said Nischal Shetty, founder of WazirX. “This consistent support across our entire base demonstrates shared belief in our restructuring approach and recovery plan.”

Zettai Labs, the parent company behind WazirX, submitted the results for verification to later present the creditor vote to the Singapore High Court for approval.

If the court approves the restructuring scheme, WazirX said it would begin redistributing funds within ten business days of legal approval.

“The resumption of withdrawals and trading will happen in phases,” the company said in its statement, “to ensure compliance with regulatory guidelines while prioritizing user accessibility.”

Mixed Reactions

Despite WazirX’s claim of overwhelming support, user sentiment online paints a more complicated picture.

Many users criticized the restructuring plan when it was first proposed, largely because it offered less than 50% of their original balances, based on the dollar value at the time of the hack.

Some felt forced to accept the plan, as the alternative—liquidation—could have delayed recovery by two to three more years.

The company was also previously accused of misappropriating user funds, including allegedly using customer assets to cover legal fees in Singapore.

WazirX Reboot

As part of the relaunch, WazirX plans to introduce a recovery token to make up for the lost amount.

It also aims to launch a decentralized exchange (DEX) and use operational profits to further compensate users.

Whether the restructuring plan will ultimately restore trust remains to be seen. For now, all eyes are on the Singapore court’s next move.